Although implementation of California’s Proposition 12 is technically in effect, experts agree the practical aspect of enforcement is less obvious. The most notable changes will follow the full enforcement of Prop 12 on Jan. 1, 2024.
“The two big changes taking place on Jan. 1 are that all uncooked cuts of whole pork meat sold in California need to be Prop 12 compliant,” says Michael Formica, chief legal strategist at the National Pork Producers Council. “And with that, compliance means you need to have been audited and certified by one of California’s approved certification firms. You can’t do self-certification anymore.”
Read the rules here from the California Department of Food and Agriculture.
Retailers will no longer be able to sell non-compliant products, which results in speculation about how this will impact the pork marketplace.
“I don’t know how long it will take for consumers in California to feel the impact. I assume that they will see an impact pretty quick,” Formica says.
What’s the Total Effect of Prop 12?
University of Missouri economist Scott Brown says that’s the biggest question on his mind going into the new year.
“Although the expected impacts are clearer today than six months ago, less pork consumption in California in 2024 could make the outlook for hog prices even less favorable,” Brown says.
Formica points out that it’s a highly competitive environment, which makes it even more challenging. The major packers would know what their Prop 12-compliant production looks like, but not what their competitors’ Prop 12-compliant supply looks like.
Retailers, especially large grocery chains, might be in the best position to know what the market looks like for Prop 12 product and will demand large amounts of the supply, adds Formica. Additional competition across the state will also determine what supply is going to look like.
In addition, there’s a “gray market” that is difficult to decipher, too, Formica adds.
“For example, on the food service side, restaurant owners can leave California and drive to Reno, Nev., and pick up a supply of meat for the week and drive back to their restaurant. They are selling a cooked product and procuring a non-Prop 12 product outside of the state. That might work for some, but isn’t practical for all.”
He also doesn’t know how much Ready-to-Eat (RTE) product will be sold. For examples, hams are covered under the statute, but a ham or other pork product that has been pre-cooked could be sold in California as RTE.
Reminder for Producers
Pork producers generally aren’t making a final sale in California, Formica points out.
“Producers need to make sure they are in close contact with their packer/processor. If you are going to get certified and go down that path, make sure you’ve been certified by a firm recognized by the state of California and that whoever you sell hogs to accepts that. Also, make sure your paperwork is in order,” Formica advises.
Although the pork industry has been preparing for the Jan. 1 deadline for some time, many questions remain about how it’s going to work in reality. Now’s the time for other agricultural commodities to take note, he says.
“What pork producers are facing and the market disruption they have seen will come to all of ag eventually if we don’t stop these kinds of poorly drafted, activist-driven bills void of any scientific basis.” Formica says.
That’s why we hope Congress steps in, Formica emphasizes.
“We need Congress to step in,” he urges. “Even the Supreme Court recognized this is a problem, but they saw it as a political problem for Congress to step up. Otherwise, we will be balkanized and facing 50 different standards in 50 different states for every different product under the sun.”
Read More:
The Real Facts About Prop 12 Implementation Modification
